The Paris-based music streamer plans to merge with I2PO, a French special purpose acquisition corporation.
Music streaming company Deezer has entered into a definitive agreement to merge with I2PO, a French special purpose acquisition corporation, the companies announced Monday (April 18).
The deal values Deezer — which has 9.6 million subscribers worldwide — at 1.075 billion euros ($1.16 billion). That’s roughly the same amount Deezer attempted an initial public offering in late 2015. The companies expect the merger to be completed by June 2022.
I2PO has 275 million euros ($297 million) in escrow from an initial public offering and it banks are confident it will meet the 135-million euro ($146 million) minimum cash threshold required for the merger. A private investment in public equity (PIPE) was subscribed by most of Deezer’s existing shareholders including Access Industries, Universal Music Group, Warner Music Group, French telecom company Orange, Kingdom Holdings, Eurazeo and Xavier Niel.
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Deezer posted an 120.6-million euro ($130 million) operating loss on revenue of 400 million euros ($431 million) in 2021, according to Monday’s press release. The Paris-based company received 60.7% of its revenue in France and 7% from Brazil. The merger will provide cash proceeds of 390 million euros ($421 million).
According to the announcement, Deezer’s current chairman of the board of directors, Guillaume d’Hauteville, will remain in his position through the end of 2022 — after which he will resign and be proposed as vice-chairman. Iris Knobloch, chairwoman of the board of directors and chief executive officer of I2PO, will become Deezer’s new chairwoman of the board of directors by no later than Jan. 1, 2023. Additional board seats will go to Jeronimo Folgueira, current CEO of Deezer; Matthieu Pigasse, co-founder and member of the board of directors of I2PO; and Alban Gréget, partner at venture capitalist firm Red River West. The remaining five board seats will be chosen by Deezer’s shareholders.
“With its well-established brand, first-class management team and scalable platform, Deezer is poised to continue to capture a significant share in the booming music streaming growth,” said Knobloch in a statement. “This is a perfect match and a transformational deal that will deliver long-term value creation for our shareholders as Deezer is a unique asset with considerable strategic avenues for future growth.”
Pinault called Deezer “the ideal combination. I2PO brings an extensive international network and a complementary skill set to help develop Deezer as the leading independent music streaming platform through strong positions in selected key markets.”
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